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Investing.com - Jefferies downgraded Ramaco Resources Inc. (NASDAQ:METC) from Buy to Hold on Tuesday, while reducing its price target to $33.00 from $45.00. The stock, which has delivered an impressive 360% return over the past year according to InvestingPro data, is currently trading above its Fair Value.
The downgrade follows Jefferies’ reassessment of the value of Ramaco’s Brook mine, which it now values at approximately $18 per share, down from its previous estimate of $30 per share.
Jefferies attributed the reduced valuation to "recent fundamental developments in the REE and critical minerals markets," which have negatively impacted the projected value of the company’s rare earth elements assets.
Despite the downgrade, Jefferies maintains that Ramaco’s core coal business alone is worth approximately $15 per share and believes the company "is well positioned to benefit from an eventual recovery in met coal prices."
The revised price target of $33.00 reflects the combined valuation of Ramaco’s coal operations and the adjusted Brook mine valuation following the reassessment of its rare earth elements potential.
In other recent news, Ramaco Resources, Inc. has announced plans to develop a Strategic Critical Minerals Terminal at its Brook Mine facility in Wyoming. This initiative aims to create a national stockpile of rare earth elements and critical minerals, with collaboration from a commodity structuring and financial advisor. Additionally, Ramaco has begun site development for a pilot processing plant and laboratory near Sheridan, Wyoming, to convert domestic carbonaceous ore into high-purity rare earth oxides. In another development, Ramaco’s Chairman and CEO, Randall W. Atkins, has been appointed to the Executive Committee of the International Energy Agency’s Coal Industry Advisory Board. The company has also been approved as a member of the Defense Industrial Base Consortium, which will enable participation in federally funded research and production opportunities related to national defense. On the analyst front, Baird initiated coverage on Ramaco Resources with an Outperform rating, setting a price target of $63.00. These recent developments highlight Ramaco’s strategic initiatives and growing influence in the critical minerals and defense sectors.
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